Previous research has shown that depression is frequently comorbid with alcohol abuse and/or dependence, and that it is predictive of poorer short- and long-term drinking outcomes. Efficacy studies suggest that alcohol and other drug (AOD) treatment outcomes improve when comorbid depression is successfully treated. However, these efficacy studies are limited in their generalizability to real-world clinical settings, and their results require replication in effectiveness trials. Further, little is known regarding the cost- effectiveness of the treatment of depression comorbid with AOD problems. This randomized, controlled trial will test whether concurrent treatment for depression and AOD disorders improves drinking outcomes (percent days abstinent from alcohol, and mean standard drinks per possible drinking day) and depression. Adult HMO members entering an intensive, 5-week outpatient AOD treatment program will be administered a depression screening scale (the Beck Depression Inventory; BDI) as part of their standard intake assessment. Members scoring 16 or greater on the BDI will be contacted and invited to participate in the study. Consenting members will be administered an intensive intake battery, assessing drug, alcohol and psychiatric history, life functioning, and other psychosocial constructs of interest. Two hundred and twelve (212) subjects will be randomized to either: (a) "usual care" AOD treatment, or (b) usual care AOD treatment plus 8 individual sessions of cognitive-behavioral treatment for depression (CBT-D). All subjects will be re-assessed for AOD and depression outcomes at post-treatment, and at 3,6 and 12- months follow-up points. HMO databases will be employed to examine health services utilization and costs outcomes. Principal outcomes analyses will examine whether (a) AOD outcomes are better in the CBT-D condition; (b) depression outcomes are better in the CBT-D condition; (c) better AOD outcomes are mediated by improved depression outcomes: and (d) CBT-D is a cost effective adjunctive treatment for AOD with comorbid depression.